YES Network Takes Its Cuts

2/06/2005 7:00 PM Eastern

By: By R. Thomas Umstead

After three years of growing pains, the Yankees Entertainment & Sports Network wants to take its swings at becoming the nation’s pre-eminent regional sports network through a package of advertising-sales and programming initiatives.

With a virtual Murderer’s Row of veteran cable and regional sports network executives, YES believes it has yet to throw its best marketing and programming pitch to operators.

On the programming side, YES will look to broaden its slate to include quality programming beyond its core pro-sports telecasts, according to president of production and programming John Filippelli. The 10.4 million-household network televises New York Yankees baseball and New Jersey Nets basketball.

DEALING IN POKER

On tap this year is The Poker Challenge, an offshoot of cable’s popular casino-based shows that will pit New York sports fans against fans from rival cities; and Road Show, a reality series that will follow several Yankees fans as they attempt to attend all 162 of the club’s games.

Looking to make the service more advertiser-friendly, both shows will feature significant product immersion and sponsorship opportunities, said Filipelli, a broadcast-sports veteran who’s been with YES since its inception.

The shows will join such staples as Mike and the Mad Dog, a simulcast of New York sports-radio station WFAN-AM’s afternoon show, and original interview series Center Stage. The network’s current lineup delivered a ratings home run not only in its market, but relative to other regional networks.

YES was the most-viewed regional sports network in the country last year in primetime, averaging 88,000 households, according to Nielsen Media Research.

“The core [programming lineup] has been performing well,” said YES president and CEO Tracy Dolgin. “Our job is now to sell that core both to affiliates and advertisers better than we’ve sold it in the past.”

From a Madison Avenue perspective, Dolgin said the network is looking to drive advertising and affiliate sales opportunities by taking advantage of YES’ appeal in the country’s leading TV market. Not only is YES open to nontraditional sponsorship opportunities, including product immersion, but vice president of advertising sales Michael Wach said the network is positioning itself as a national outlet to advertisers.

At this stage, the network is already 25% ahead of 2004’s pace in terms of its advertiser base, having inked deal with automakers Suzuki and Kia, as well as Bank of America this year, according to Wach, who joined YES last November after serving as general sales manager at WNYW, Fox’s flagship station in New York.

Although YES had carriage deals with every MSO in the market, as well as DirecTV Inc., it is currently in negotiations to renew two of those pacts. YES chief operating officer Ray Hopkins would not disclose which MSO agreements have expired.

The network has also yet to reach a deal with EchoStar Communications Corp. Hopkins, who joined YES last month after leaving Gemstar-TV Guide International Inc., said he hopes to eventually reach an agreement with the DBS provider.

“Anytime you have a hole, it’s not the best of situations,” said Hopkins, a veteran Fox Sports Net executive. “But we’re a fully distributed network, and with or without filling in that hole, this business is still a great business.”

A VOLATILE MARKET

Such negotiations are significant given the volatile New York-area regional sports network marketplace, in which YES’ competitors and MSO affiliates are battling both at the negotiation table and in the courts.

Cablevision Systems Corp. is currently embroiled in carriage negotiations with Time Warner Cable over a proposed $4 combined monthly fee for Cablevision’s Madison Square Garden Network and FSN New York. Last month, the two sides extended talks to finalize a deal, effectively keeping MSGN and FSN New York in front of 2.3 million New York area Time Warner Cable subscribers through March 6.

Meanwhile, Cablevision is fighting the New York Mets decision to opt out of its MSGN deal to start a new network, in partnership with Time Warner Cable and Comcast Corp.

A New York State judge last December denied the MSO’s request for an injunction to block the development of the Mets’ proposed regional sports network until after the team’s carriage deal with Cablevision expires at the end of the 2005 season.

NO MSO OWNER

With Time Warner and Comcast backing the Mets channel and Cablevision’s control of MSGN and FSN New York, YES would be the only network without a local MSO owner.

But Dolgin said YES, which had been engaged in its own bitter contract contretemps with Cablevision, now has good relationships with all area operators and doesn’t consider the lack of MSO ownership a liability.